The price of renewable energy is expected to rise in the UK over the next couple of years because there is insufficient renewable capacity to meet government renewable targets, according to Platts and the Renewable Power Association (RPA).
The value of Renewable Obligation Certificates (ROCs) could rise to over £60/MWh, the two organisations claim. They made the announcement as they launched Platts Renewable Obligation Certificate Price Marker. Published by Platts and produced in conjunction with the RPA, the marker will be updated every six months. It suggests there may be insufficient renewable energy projects planned to enable the government to meet its 2010 target for renewable energy.
The UK government wants 10 per cent of the electricity supply in Great Britain to be provided from renewable sources, by 2010 . ROCs, one for each MWh of electricity generated from a renewable source, will be required by companies selling electricity in order to show that they are meeting this target. The aim of the price marker is to predict the likely value of ROCs over the coming five years.
The value of ROCs will change as more green plants come on line. Currently they are trading at over £40/MWh. Even under a high growth scenario, where all green projects with planning permission are built and start on time, the value of the ROCs is estimated to be around £40/MWh by 2006/7. For a medium growth scenario the expected value is just over £50/MWh while the low growth scenario pushes the price beyond £60/MWh.
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